Agasti Holding ASA makes significant cost cuts

Agasti Holding ASA (Agasti) undertakes significant cost cutting and pruning of its investment advisory subsidiary Navigea Securities (Navigea). The cuts will happen over a period of time and in total affect 80 - 100 employees, providing an annual cost reduction in the range of NOK 100 - 120 million. In parallel with this, there are concrete ongoing discussions regarding an exit from the investment advisory operation in Sweden as well as from specific offices in Norway.

Agasti takes these actions in order to improve the group’s profitability while simultaneously working to manage its customers’ investments and future investment needs in a more efficient and streamlined manner. This will partly happen through its subsidiaries Obligo Investment Management (Obligo) and Agasti Wunderlich Capital Markets (AWCM).

“We have conducted an extensive turnaround operation in the past 18 months. In addition to establishing new profitable business areas and reversing a five-year trend with negative results, we have recruited top expertise with national and international experience that enables Agasti to serve our customers in the best possible way, but through a much more efficient organization. The processes we are currently going through is a continuation of the turnaround operation we started in the autumn of 2012. The objective is, and has been, to streamline and cut costs significantly while establishing a structure that ensures that our customers are well looked after,” says Jørgen Pleym Ulvness, managing director of Agasti Holding ASA.

As earlier announced, Agasti’s board of directors and management have discussed alternative strategies throughout 2013, including a scenario without an investment advisory function. The latter is highly resource intensive and provides limited growth and earnings opportunities in today’s market.

In March 2014, Navigea received a notification from the Financial Supervisory Authority (FSA) of Norway regarding planned withdrawal of Navigea’s licenses. The final decision is expected during the first half of 2014 and Agasti is prepared for the authority to confirm their notice of revocation of Navigea’s licenses.

“Even though these changes come at a stage when Navigea expects an important final decision from the FSA, this is something we would have considered and partially implemented anyway. The main difference is that the changes will be made sooner. We are trimming the operation to create solid results for our collective business, while at the same time focusing on – and feeling confident about – safeguarding our customers in the best possible manner. We will continuously assess the need for further moves to optimize our business, but not at our customers’ expense,” says Ulvness.

Customers’ investments within property and other direct investments are well taken care of by the investment management team in Obligo. Efforts are currently being made to establish solid and liquid fund of funds solutions through AWCM.

Preliminary analyses indicate that the group may further strengthen its profitability following a possible full or partial liquidation of Navigea’s business, taking into the account the estimated restructuring costs of NOK 40 million – with reference to earlier stock exchange announcements. This estimate could be significantly reduced should Agasti succeed with its structural alternatives.

Contact details:
CEO, Jørgen Pleym Ulvness, phone (+47) 906 67 877
CFO, Christian Dovland, phone (+47) 908 84 730
CCO, Tor Arne Olsen, phone (+47) 900 90 470

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.